Anchorage seafood factory loses state funds

Posted: Friday, May 23, 2003

ANCHORAGE (AP) The state has rejected a request to keep pouring millions of dollars into the struggling Alaska Seafood International plant in Anchorage.

The seafood factory can no longer can count on free rent in the huge state-owned building it occupies. And the state will not continue paying $100,000 a month for power, insurance and other upkeep on the building as the company had requested.

Those were the terms that Mike Barry, chairman of the state agency that acts as ASI's landlord, laid down in a letter Wednesday to Joseph Julian of Sunrise Capital Partners, the seafood company's New York-based majority owner.

The letter marks the first major break in government support for the company.

Founded by Howard Benedict, a Connecticut real estate man who moved to Anchorage, ASI in the late 1990s became the state's partner in a bold attempt at a huge world-class manufacturing plant. ASI envisioned turning millions of pounds of Alaska salmon, halibut and cod into seasoned and smartly packaged heat-and-eat consumer goods.

The factory was erected with about $50 million in state money and was supposed to employ 450 people.

From the start, however, ASI was beset with money problems with its Taiwanese financial backers, management upheaval including Benedict's ouster, weak sales, layoffs and other troubles. Today, the company employs about 50 people and occupies only a sliver of the 202,000-square-foot factory.

ASI has never paid any rent to the state, which bought a minority share in the company as part of several financial restructurings. In the most recent one last fall the state committed $2.5 million more to the venture.

The state's denial of ASI's request for more help does not mean the end for the company, a company executive said Thursday.

''We're moving on with private money, and we're fine with that,'' said Doug Bell, chief operating officer at the plant.

In October, ASI must start paying about $360,000 a month in rent under the current agreement with the state. The company recently claimed it wouldn't have the money based on its sales.

But on Thursday, Bell said, ''We will be absolutely capable of meeting our obligations.''

Also on Thursday, ASI announced its shareholders had committed $1.6 million in new money.